O.T., sortof -- HK poised to be Asia's Silicon Valley'
By Eunice Wong
STORY: HONG KONG'S venture capital market could help the territory become the ``Silicon Valley of Asia', according to Information Technology Services Department director Lau Kam-hung.
Mr Lau said Hong Kong's venture capital market, among Asia's largest, would play a key role in the city's drive to become a truly knowledge-based economy because access to financial and capital markets was crucial for the commercialisation of innovative ideas and research results.
``On the financial side, we have the second largest financial capital market in Asia to Japan,' he said yesterday at a forum on ``Venture Capital & Technology Financing'.
Mr Lau said that Chief Executive Tung Chee-hwa had remarked during a visit to Silicon Valley that a US$1 billion (HK$7.8 billion) company was a very successful company in Hong Kong, ``but in Silicon Valley, a US$1 billion US company may be just at the starting stage'.
``Certainly, compared with Silicon Valley, Hong Kong is a beginner in IT innovation,' Mr Lau said. ``However, we believe Hong Kong is already in possession of a critical success pattern that will make us the Silicon Valley of Asia.'
He said the factors for success included Hong Kong's free market, its enterpreneurial spirit, a sound legal system, excellent infrastructure and a well-developed capital market.
Hong Kong is well-known as one of the most free and open economies in the world.
``We believe businessmen here should be absolutely free in making their business decisions and we will make every effort to uphold that principle,' Mr Lau said.
At the same time, he said Hong Kong's sound legal system was fundamentally important in providing a transparent and supportive legal framework for its free market.
This legal framework was particularly important in IT matters, where protection of intellectual property rights was a major concern.
Mr Lau also said advanced telecommunications were critical to the development of e-commerce, a cutting-edge tool for Hong Kong's competitiveness in the CyberWorld.
``Simply possessing all these critical success factors is not enough to turn Hong Kong into Asia's Silicon Valley,' Mr Lau said. ``A lot more has to be done and the government has the vital role to play in facilitating the development of advanced technology.'
New high-technology projects in Hong Kong such as the CyberPort and the Science Park had attracted considerable investor interest, reflected in the number of multi-national companies which have already signed up as CyberPort tenants.
Mr Lau said another initiative to boost Hong Kong's industry was the establishment of an Applied Science and Technology Research Institute (Astri) which is targeted for completion in 2004.
Its role is to carry out high quality mid-stream research and development projects for transfer to industry.
And he said the $5 billion Innovation and Technology Fund would provide essential financial support to projects which would help upgrade the city's manufacturing and service industries. Applications were invited last year and Mr Lau said so far more than 300 applications had been received.
The Small Enterpreneur Research Assistance Programme, part of the fund, would help technology firm start-ups.
Mr Lau said such assistance was particularly important to SMEs (small and medium enterprises) in the IT industry as they often found it difficult to secure funding.
Venture financing is provided through the Applied Research Fund to the private sector to assist companies undertaking technologically innovative projects with real commercial potential. The $750 million Applied Research Fund, managed by three leading venture capital firms, has made 10 investments so far.
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